A. Schulman targets major growth in Asia

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: May 13, 2014 12:34 pm ET
Updated: May 13, 2014 12:37 pm ET

Image By: Steve Toloken Derek Bristow, vice president and general manager of Asia Pacific for A. Schulman Inc.

Related to this story

Topics Materials, Materials Suppliers, China, Asia, CHINAPLAS
Companies & Associations A. Schulman Inc.

SHANGHAI — U.S.-based materials firm A. Schulman Inc. has ambitious targets for its Asia business, including actively considering acquisitions and additional manufacturing and research capability, company executives said at the recent Chinaplas trade fair.

While Asia is currently underrepresented in global sales for the company, it wants to grow the region from 10 percent of worldwide operating profits to about 20 percent in five years, said Derek Bristow, vice president and general manager of Asia Pacific for Fairlawn, Ohio-based Schulman.

“That’s going to be organic growth as well as acquisitions,” Bristow said. “There’s a big focus on Asia and particularly China to grow to a critical mass that we need.”

The company is in the midst of a previously announced plan to double capacity at its China compounding plant in Dongguan, Guangdong province, to 50,000 metric tons, adding both engineering plastics and masterbatch capacity. It expects to complete that in six months.

But it’s also looking beyond that at expanding its capacity for color concentrates, either adding lines in Dongguan or setting up a new plant around Shanghai within two years, Bristow said in an interview at Chinaplas, held April 23-26 in Shanghai.

Schulman recently added three small color concentrates production lines in Malaysia, with about 5,000 metric tons of capacity. It’s a new business for it in Asia.

“A. Schulman globally does pretty well with the color business, custom performance colors,” Bristow said. “In Asia until about a year ago we’ve never done any color. So it makes sense for us to get into that. We have the technology from elsewhere.”

Longer-term, Schulman executives said they want to do more research and development work in Asia to better tailor products to local customers.

“We have early plans, and this may take perhaps three or four years, but we do want to set up a more thorough, fundamental R&D capability in Asia, somewhere,” Bristow said. “We haven’t quite determined where that should be but we see the need and we’re planning for it.”

One new product already developed for Asia: A grade of its Papermatch replacement paper material with a much smoother surface for the Japanese market.

“We want to have a lot of newly developed products for the domestic customers,” said Roger Zhao, general manager of the Dongguan factory. “We really put a lot of effort to develop new products for China.”

“The trend we see in Asia is that technology has certainly caught up with the rest of the world and probably overtaking other regions,” Bristow said.

Asia is also fitting into A. Schulman’s broader strategy of growth through acquisitions. In January, the company announced it had filled a new position, a senior director of corporate development to oversee global mergers, acquisitions and divestitures.

Last year, it bought the U.K.-based thermoplastics compounder Perrite Group, which added about 20,000 metric tons of capacity at a former Perrite plant in Malaysia, doubling the size of its engineering plastics capacity in the region, Bristow said.

“We are actively looking at acquisitions but I can’t elaborate on that right now,” he said. “It’s definitely part of our growth strategy.”

It opened its first plant in India last year and will likely add a second production line there in the next 12 months, he said.

Globally, the company had $2.1 billion in sales in its most recent fiscal year ending Aug. 31, from 38 manufacturing sites.

Schulman’s Asia business grew 500 percent in the five years prior to 2013, although from a very small base, and the company is targeting to grow it another three or four-fold by 2018, Bristow said.

“To be honest, our market share is so small that we have a huge upside potential to grow,” he said.


Comments

A. Schulman targets major growth in Asia

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: May 13, 2014 12:34 pm ET
Updated: May 13, 2014 12:37 pm ET

Post Your Comments


Back to story


More stories

Image

Acquisition expands Rieke Packaging's stake in Asia

July 28, 2014 4:39 pm ET

Diversified rigid packaging components producer Rieke Packaging Systems now has a bigger footprint in Asia.    More

Image

Formosa to be compensated for Vietnam riot

July 28, 2014 1:44 pm ET

Taiwan's Formosa Plastics Group will receive $2.39 million from the Vietnamese government and insurance companies for damages suffered during the...    More

Image

Ukraine's Group DF may be forced to sell Crimea-based additives plant

July 28, 2014 10:12 am ET

Group DF, the industrial business of Ukrainian tycoon Dmitry Firtash, may be forced to sell off Eastern Europe's biggest producer of titanium oxide,...    More

Image

DuPont resins help take Nike golf balls 'Fore!'ward

July 25, 2014 1:07 pm ET

It may be difficult to imagine just how much science, not to mention rubber and plastic components, go into a golf ball. But global giant DuPont Co....    More

Image

Bioplastics maker wins government funding

July 25, 2014 12:13 pm ET

Canadian bioplastics maker Solegear Bioplastics Inc. has won $1.6 million in funding from the government-sponsored Western Innovation Initiative (WINN...    More

Market Reports

Plastics Recyclers Data Report & Directory

This exclusive MS Excel database contains all the companies from Plastics News' ranking of top North American Recyclers and Brokers by reprocessed volume and also includes a directory with materials processes, services offered and company contact information. Data is based on primary research by PN editorial staff.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events